[Seoul Pre-Market Brief] AI Stocks Turn the Tables, Buying Switch Flips Back On

The announcement of a $630 billion funding support package for Anthropic has eased concerns about AI investment, with the semiconductor sector surging 3.5% and oil prices falling below $100.

Key Market Developments

• ① $630 Billion Support for Anthropic: AI Investment Sentiment Revived

The financial sector's commitment to provide a $630 billion funding package for Anthropic's technology acquisition has revived AI investment sentiment.

Banks such as Bank of America, Citi, Morgan Stanley, and Blackstone are involved, providing the necessary funds for Anthropic to purchase Broadcom's technology and lease TPUs. It is understood that Broadcom will act as a guarantor in the event of any loan defaults.

Anthropic's improved revenue structure has also drawn attention. The proportion of revenue from non-top-five customers has increased from 64% in Q1 to 79%, while the ratio of infrastructure spending to revenue has decreased from 201% in the first half of last year to 55%.

According to Evercore, all of the Fortune 10 companies are spending on Anthropic, and over half of the Fortune 500 companies are utilizing more than $100,000 annually. This indicates that the adoption of AI technology is spreading beyond large customers.

Strong Demand for Meta's $25 Billion Stock Sale

Despite Meta's $25 billion stock sale, demand was five times higher, easing concerns about the sustainability of AI infrastructure investments amid a recent wave of large-scale fund-raising.

• ### Semiconductor Sector Surges 3.5%... AI Stocks Regain Buying Advantage

The semiconductor sector led the charge, rising 3.5% as AI investment expectations revived.

Broadcom gained approximately 4% on expectations of benefiting from Anthropic's IPO and expanded investments, while major semiconductor stocks such as AMD and Intel also showed strength. Micron also experienced an upward trajectory.

Nvidia benefited from positive news of expanded AI collaboration with Meta and a $30 billion investment in this funding round. The two companies also agreed to cooperate in developing a suite of AI models.

Wall Street has seen a clear trend since October, with investors selling semiconductors and buying defensive stocks like consumer staples. Until now, semiconductors had fallen 12% monthly, while energy rose 13% and consumer staples gained 9%.

Argent Capital noted the repetitive cycle of increased AI concerns followed by renewed buying of related stocks, assessing that the buy switch is currently back on.

WTI Crude Oil Slides Below $100 as FOMC Looms, Interest Rates Stabilize

International oil prices retreated, with WTI falling 1.83% to $99.90 per barrel. The easing of tensions in the Middle East, attributed to Iran's hints at dialogue following Houthi attacks on Saudi oil facilities, pulled oil prices downward.

Ahead of the FOMC meeting, U.S. Treasury yields remained stable, with the 10-year note yielding 4.99%, staying below the 5% mark.

BNY Mellon forecasts a high likelihood of the FOMC maintaining interest rates but does not entirely rule out the possibility of further increases. The market's focus is on the Fed's messaging, which will provide insights into the future policy direction rather than solely on the rate decision itself.

Market Analyst's Perspective

Recently, the stock market has exhibited several indicators suggesting a potential bottom. At the beginning of the week, both the KOSPI and KOSDAQ entered the oversold zone based on ADR criteria. Last week, the proportion of KOSPI stocks trading above their 200-day moving averages fell below 20%. Historically, during significant bottoming periods, this ratio has ranged between 10% and 20%.

The KOSPI Index Faces Critical Juncture as Dollar-Denominated Value Nears 60-Week Low

The KOSPI index has dipped to levels near its 60-week low when converted to dollar terms. Considering that AI has been the driving force behind market movements over the past year, the current position is a crucial juncture to assess whether the AI investment cycle is showing signs of disruption.

There are still hurdles to overcome. We must monitor potential hawkish messages from the FOMC, military tensions in the Middle East, and the likelihood of profit-taking after Samsung Electronics and SK hynix's earnings announcements.

On the other hand, the sharp decline has significantly reduced the price burden on individual stocks. It is essential to continue observing the performance of existing leading stocks, industries where investment is intensifying, and stocks that attracted institutional buying even during the October decline.

Key Focus Points for Today:

AI Funding: Sustaining Investor Sentiment Post-$63 Billion Injection into Anthropic

The market will be watching to see if the recent $63 billion financial support for Anthropic sustains the recovery in AI investment sentiment.

Semiconductors: Reflecting the +3.5% Gain in U.S. Semiconductor Sector on Domestic Giants

Samsung Electronics and SK hynix are expected to reflect the positive performance of their U.S. peers, with the domestic semiconductor sector rising by 3.5%.

FOMC: Focus on Potential for Further Rate Hikes, Beyond the Anticipated Hold

While a hold on interest rates is widely expected, the key focus will be on whether the FOMC leaves the door open for additional rate hikes, potentially putting late-session selling pressure on markets.

Oil Prices: WTI at $99.90... Stability Below $100 in Focus

Supply and Demand: MSCI Korea +3.03% and Overnight Futures +1.99% as Foreign Investors' Buying Continues

Key Indicators

Dollar Index: 102.34 (+0.38%)

International Oil Prices: $99.90 (-1.83%)

Volatility Index: 17.52 (-4.73%)

U.S. 10-Year Treasury Yield: 4.99%

MSCI Korea Index: +3.03%

Overnight Futures: +1.99%

Source: The Stock Story by Mr. Market t.me/shmstory

YouTube: Mr. Market TV www.youtube.com/@blueoak1004

This article has been reconstructed with the consent of the author of The Stock Story by Mr. Market. All content may contain errors and is not to be construed as a buy or sell recommendation, nor should it be relied upon as a basis for any trading decision. The content of this post cannot be used as legal evidence under any circumstances.